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Pentagon Heads Back To Work Under Uncertain Budget

A stop-gap budget deal reached by Congress to reopen the government this week ends one problem, but puts the Pentagon back in the same difficult position it was about a year ago — operating at last year’s funding levels and juggling at least three potential futures.

A continuing resolution (CR) provides money for the military at fiscal 2013 levels through Jan. 15, 2014, but prevents new-start programs from beginning and offers little in the way of flexibility.

“It’s a Groundhog Day approach to budgeting,” says Robert Hale, the military’s top budget official, repeating the line he used between October 2012 and March 2013, when Congress finally passed an appropriations bill to provide fiscal 2013 funding.

Most Pentagon accounts, for Air Force aircraft procurement, for example, are written broadly with one large lump sum, giving budget planners some flexibility in how individual programs are funded under a continuing resolution in the next year.

That is not the case with Navy shipbuilding, where line items are included in each year’s budget bill and changed each year. That means under a continuing resolution, those individual programs are supposed to be funded at the same level, and this poses a problem for programs such as aircraft carriers that are expecting an increase in funding.

For example, the Navy’s carrier replacement program received $565.4 million in fiscal 2013. But the Senate Appropriations Committee had voted to increase that amount to $917.6 million this year.

Capital Alpha Partners analyst Byron Callan said Oct. 17 that the Navy’s SSBN(X) Ohio-class submarine replacement program could also be near the top of the list of plagued programs under a CR.

“The planned funding increase in the Ohio-replacement program for fiscal 2014 can’t happen, and this could delay a program with hard deadlines,” he said.

“Similarly, the Navy can’t award the new multiyear contract for Virginia-class submarines.”

Along with the challenges associated with a limited, short-term spending bill, the Pentagon is continuing to plan for three different budget scenarios — continued sequestration requiring about a $50 billion reduction to fiscal 2014 budget figures, the numbers provided for under the current CR and also the numbers laid out by the president’s 2014 budget request.

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